Part 2. Comments welcome.
So what you're saying is that the burden of proof is on the people citing that paper to prove its applicability to Bitcoin, since the authors didn't do it for you. It took only a few minutes to see some pretty large holes in the idealized model used by the paper. It is theoretical only, and has no practical application. It assumes a reality that is in contrast to how things are actually in operation today, so... |
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Good paper.. The Economics of Bitcoin Transaction Fees: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2400519We study the economics of Bitcoin transaction fees in a simple static partial
equilibrium model with the specificity that the system security is directly linked to
the total computational power of miners. We show that any situation with a fixed
fee is equivalent to another situation with a limited block size. In both cases, we
give the optimal value of the transaction fee or of the block size. We also show that
making the block size a non binding constraint and, in the same time, letting the fee
be fixed as the outcome of a decentralized competitive market cannot guarantee the
very existence of Bitcoin in the long-term... A myopic dissertation of double-entry accounting era thinking. He's criticizing a startup company, not Bitcoin. Bitcoin is about breaking paradigms in economics. At least he admits using simple statistics, but his conclusion has been debunked. Then I noticed this paper was written a year ago when the FUD machine was on overdrive. hmmokee... Block size limits are not so much about mining economics. More about controlling threats to Bitcoin and keeping it both secure and useful. There is room in the blocks today, and some transactions with lower than the recommended fees get queued anyway, so there is already a market for block space without hitting the max size. Free transactions still do get processed eventually. This is fairly optimal (and this current reality is in contrast to assumptions made in the paper, the paper is not really so great). If you are concerned about miner economics, consider (as mentioned in the paper you cite by pointing to the [urlhttp://www.cs.cornell.edu/~ie53/publications/btcProcArXiv.pdf]selfish mining paper[/url]): The fees are a tiny minority of the miner rewards today. Part of increasing that percentage is having more transactions per block. ...However, the notion of selfish mining is created to an extent by very large block sizes. Larger Blocks take a longer time to propagate and so have a similar effect (but lesser and non-insidious) to block withholding. So at the end what are the real problems with the hard-fork ?
- Bandwidth
- Download/upload (of all the users)
- The reward fee for the Pools (miners).
..
...
Add storage, search, maintenance, then multiply by the number of full nodes. I don't thing there is much of a reward fee problem here though. Which part of the paper validates whether or not the model they chose to examine is an accurate of the present or future operation of the Bitcoin network?
Part 2. Comments welcome. It is not accurate to the present or future operation of the Bitcoin network (as I mention above also), it is a model only, and not at all a complete one. Like doing physics but discounting friction. It isn't really close enough to be useful. |
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Lets implement a maximum block size that can adjust to what is needed rather than just guessing at what might be needed? Lets build a protocol for the next 100 years, not the next 100 weeks? I think we can do better, and we currently have the time to do so.
The frustration with arguing with many of you is that you come at this issue as though it were an economic problem. It's not an economic problem. Economically, the block size should not be artificially limited. We agree on this, or were you just strawmanning? 
What it is, instead, is a technical problem, or a political problem, or an existential problem. The problem is not whether miners will continue to get paid. That hasn't been a problem for years. Mining is so ridiculously huge at this point that any "security" achieved by marginal increase in hashing power pales in comparison to other, much larger, existential threats to Bitcoin. And those *do* exist. What Bitcoin is attempting will not be a cakewalk.
Gavin has done a good job of laying out the technical limitations, which, frankly, are few. He says the technical limit is somewhere beyond 16.7GB. I have no reason to dispute this. And I have seen no one actually attempt to dispute it. If you think 20MB blocks are too large, you probably have sub-standard internet service. I'm right there with you. Most people probably have sub-standard internet service.
Which brings us to the real issue. No one has done a decent job of laying out the political problems, and the existential threats posed by a block size increase. A lot of people have made various insinuations that there is a plot against Bitcoin, which, if you read my posts, I would even tend to agree with. Yet there is little concrete discussion of what that threat even is. The threat is usage? The threat is growth? The threat is voluntary centralization?
*One* person has suggested that 2MB blocks are acceptably large. Come on, be realistic. 2MB or 1MB, really just doesn't matter at all. Such a limit is simply laughable. What an idiotic hill to choose to die on. Anyone who insists on such a limit would be part of the real "plot" against Bitcoin, as far as I'm concerned. For all of your crying about "decentralization," to insist on crippling Bitcoin at a rate that is only useful for gigantic financial institutions is just embarrassing. At that point, if that's the best you all can come up with, then it will be time to move on to plan B, because this iteration of Bitcoin will have failed.
This is just not a serious discussion, at all. There are a dozen different possible outcomes, here. There are a dozen different ways that Bitcoin can evolve in the future. So far we have explored three, maybe four of them. Please try to think a little outside the box.
Gavin has made a good start but it is only a beginning. He's run some software testing and made some proposals. He also looked up the historic data network growth rates in North America and decided that that pattern is good enough to base the protocol upon. Nielson's law. That is where we diverge. Gavin would argue that since it is an upper boundary, it can only be "too low" and never "too high". Where his reasoning fails is that there is a cost to the transaction data set and this cost is borne out by the number of times it must be replicated across the network. There are pernicious effects of permitting too large blocks to be confirmed. Increased orphaning, bandwidth attacks on smaller nodes, excessive spamming would be a few of these. We agree that his proposal is 'the simplest that could possibly work'. However, it is not so much to ask for better than 'could possibly'? We'll end up settling for 'the best we can do by the time we need to do something', and a number of folks would agree that his proposal isn't the best we can do. It is merely an expedient one. |
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well, a hard fork new chain gets started with x hashing rate. blocks are 10 min apart, just like they were with Bitcoin back in 2009. any increases in hashing rate from miner adoption that decreases the frequency below 10 min is automatically adjusted every 2 wks with difficulty. we've never had a problem with block intervals going to days or weeks in Bitcoin so why should it happen with a new chain, given it is a hard fork with minimal protocol changes? At the point of the fork, the difficulty has already been set based on the entire network's hash rate. Miners have to choose one fork to mine. If half of them go one way, and the other half goes to the other fork, then both forks are mining at with difficulty at double the value it should be, so both forks will experience 20 minute block times until the next difficulty adjustment. If the split is 70/25, then the smaller chain will experience 40 minute block times and the larger chain will get 13 minute block times. And the 20 minutes are for both forkd for a time of 4 weeks, the 40 minutes for a time of 8 weeks for slowfork. Add the value crashing, there's enough time to do some real damage, in the worst case to both Gavincoin and Mirceacoin. This math assumes the fork starts just after adjustment. |
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Bitcoin will never be a national currency, or at least no one of these actual nations. Any democratic govern will want to take possession of it, but it is decentralized and they cannot... It is complicated as situation.
YES. It is much more suitable to an international, non-national, non-political currency. There are some weird legal and regulatory effects of a country making it a national currency in many jurisdictions, they aren't particularly beneficial for Bitcoin, just a different set of laws. Some are kinda good, others not so much. |
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And more generally, I think a lot of people make a misjudgment in assuming that actors in the bitcoin ecosystem will behave with only very short-term focus. Tim Swanson (@ofnumbers) is particularly bad about taking these absurdly narrow views and spitting out blog posts full of "analysis". Unfortunately his analysis is often not particularly useful because his assumptions are broken.
Exactly, a particularly absurd attack is that bitcoin will fail due to mining centralization and this centralization will enable miners to act poorly. The reason this is absurd is the more mining becomes centralized the more capital each miner has committed to the project, which means miners will act with more of a long-term mindset as they become larger and commit more capital. But even if this wasn't the case, the incentive structure of mining means that even IF miners took a short-term only mindset (which is illogical), incentives still encourage them to only mine the longest chain. To break bitcoin would require a large 51% entity who could operate without economic concerns or constraints, i.e. they have billions in capital to destroy specifically to attack the project, expecting a full loss if successful. Only a government could try to pull this off at this point, the private market will not. The underlying assumption here is that (Bitcoin) economics is the only motivator. If there exist entities that both care about Bitcoin and want to end it (and have sufficient motivation and resources), than this argument fails. There may well be much cheaper ways to end bitcoin than a persistent 51% attack, (and such a persistent 51% would not be guaranteed to succeed anyway), so it is probably in the 'good enough' category. It is not in the 'safe' category (though Andreas A. disagrees with me on this). |
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If this limit increases faster than than the interest in spending money for transactions then it will kill Bitcoin. Bitcoin has survived for 6 years without the block size limit effectively constraining the block size, why will this established pattern suddenly reverse if the limit is maintained high enough to not constrain the block size (or removed entirely?) I wouldn't go so far as to claim that it WILL kill Bitcoin, but a too-high max block size does permit bad behaviors, which can have pernicious effects. There really isn't a reason to have the capability for miners (or pools) have the ability to include 60x the normal amount of transactions creating huge blocks that they can propagate quicker than small sites can download and verify. This gives yet another edge to the largest miner pools, and it is unnecessary. Gavin's solution is a simple one, which is a good thing, but it is obviously not the BEST solution. Implementing anything whilst IN a crisis, we will end up with a sub-optimal solution, because folks will do whatever it takes to get out of the crisis. We are NOT in a crisis now, our average block size is well less than 50% of the max, there isn't any massive queueing, things are fine today, so lets do it right rather than just what it expedient? Lets implement a maximum block size that can adjust to what is needed rather than just guessing at what might be needed? Lets build a protocol for the next 100 years, not the next 100 weeks? I think we can do better, and we currently have the time to do so. |
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Hey I'd be fine with a 5 MB block size limit, and some percentage increase every year afterward. I think 20 MB would probably be better, but that's far less important than putting in place some dynamic hard limit, ANY dynamic hard limit, that steadily increases, year by year, so that we never have to do a hard fork again to change the limit. If this limit increases faster than than the interest in spending money for transactions then it will kill Bitcoin. It has to cost quite a lot to do transactions. If it doesn't there will be too little interest in mining, and a 50% attack will be cheap. Currently the interest is going down, so there is a fairly large chance that any changes will do more harm than good. What's certain is that if there is a fork then all kinds of problems and scams will follow, and the Bitcoin critics will have a field day in the media. I'd disagree that it has to cost a lot to do transactions. But I would like to NEVER have to do a hard fork again on this issue. Uncontrolled increases which are insensitive for the need for transactions don't provide such a guarantee. They will be too large or too small. We know that we can not accurately guess the future of Bitcoin. So from this perspective what is needed is a BIP to track the # of transactions (or another metric that corresponds to block size) and use it to set the Max Block Size. Then it could adjust in a similar way to difficulty. Hard minimum-maximum may be set (so that there is no pernicious incentive for empty block attacks), and there can also be a hard maximum-maximum set (so that spamming attacks can't spiral out of control before some intervention is taken). We all agree "don't fix it if it isn't broken". (though intelligent people may disagree on whether it is broken) We all should also agree "don't fix it if you don't know how". (there is currently broad dissent on the how) This would give us a "how". |
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Net "Neutrality" is government managed price controls and forced reduction of service quality, which will result in reduced investment in internet within the USA and slower speed for everyone, as well as increased regulation.
Substantiate your claims, especially in the face of overwhelming evidence that they are false, as evidenced by the UK where this system already exists and none of this is true. The evidence is overwhelming for, not against this claim, especially if you take the example of the UK, (where presumably you are talking about Ofcom?). I don't know everything there is to know about the regulatory environment of the UK, but the UK is perhaps the only greater surveillance state than the USA. There are more surveillance camera's per person there than anywhere. I do know that in the UK, there is a 'minimum quality' of service. There is no prevention from selling faster networks, only that it be provided wholesale to others that also want to carry over the same network and do their own customer management. This is somewhat less horrible, than the US proposals that prevent the tariff of QoS traffic entirely from the provider side. That this technology has been available for about 20 years to business networks to use internally and allow their applications to work and preventing it on the internet damages the internet, it does not 'protect' it. Second "Net Neutrality" does NOT exist in the UK regulatory environment, despite your imagination that it is already implemented. Third, the notion that some 'threat of commercial discrimination' justifies the mandate of actual commercial discrimination and the prevention of commercial sale of faster networks by government fiat is absurd. The BIGGEST LIE of the net "neutrality" hucksters is that the sale of QoS networks where quality can be guaranteed for applications that require it somehow slows everyone else down. You should be ashamed of yourself for propagating this nonsense. People that have even a passing understanding of MPLS QoS packet prioritization technology or some experience with it know better. To prevent the sale of these by some mythical claim of imagined anti-competitive activity (where there are already quite good laws to prevent this) is a smoke screen, and the apologists for this are simply uneducated sheep following some misguided notion of "fairness" to enforce abject unfairness and a theft of freedom. So since this law and new regulatory authority are entirely unnecessary, and actually harmful to the development of the internst, why add them? |
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LOL at peering being extortion.
Internet freedom does not come from free internet (much less paid by government money extracted from the humans they farm).
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SCIence Property Auction ( SCI Points )
40 @ 0.4 |
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SCIence Property Auction ( SCI Points )
The recent research subgame has generated SCI points to some enterprises that have been able to setup research facilities. I have decided to auction off some the newly generated SCI points. The points can be used in future advancements in the game when technology advances and technology can be unlocked.
The recent capability to create windows in the kingdom was unlocked with 1000 SCI points.
The recent Royal Window Works company foundation auction valued SCI points at 2M per point.
I am auctioning off 100 SCI points in this auction.
The auction will end in 3 days from the time of this post.
Please post your bids in the following format:
(no SCI points) @ (price per point)
This is a great opportunity to acquire Science points to be used in future technology advancements if you do not have any research facilities!
SCI ence Points AuctionCurrent situation:20 @ 0.25 Mm Haridimous 20 @ 0.20 Mn Earl of Rome 60 @ 0.1 Mm Duke of New Liberty ---------------------------------------- 40 @ 0.1 Mm Duke of New Liberty Auction Ends Later today Some great deals here considering that new technology can lead to new game products and significant income in the future! (clothes, transportation, etc) 60 @ 0.15 50 @ .3 |
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Net "Neutrality" is government managed price controls and forced reduction of service quality, which will result in reduced investment in internet within the USA and slower speed for everyone, as well as increased regulation. There is nothing good about this (unless you hate Americans being on line). What does this have to do with Bitcoin? "Expanding the FCC’s jurisdiction beyond activities that have a direct impact on infrastructure investment to encompass those that have a tangential impact on infrastructure investment represents a significant extension of the FCC’s power. Indeed, it potentially leaves the door open for the FCC to take measures aimed directly at the content and application industries—a prospect widely feared by advocates and critics of network neutrality alike." http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2511266So Net Neutrality opens the Fed to regulate/throttle internet applications and content if they decide it is more fair. Doing this of course requires deep inspection of all traffic, which as the new regulating authority, the FCC can mandate. So money that could have been spent on faster networks, instead won't be, because no incentive. Instead government will force the money to be spent on traffic inspection. End result, slower and more expensive networks than today for everyone, and no way to go faster even if you want to pay for it. Stupid people. They fall for the "we need to prevent monopoly" arguments (there are already plenty of laws for this). This new law has NOTHING to do with protecting small start-ups or innovation, and EVERYTHING to do with expansion of government power and surveillance. |
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Low oil prices, or deflation generally, explained with the age of the capital.
(The time from investment to finished consumer goods)
All investment comes from savings, that is the consumer consumes less than the producer produces, (and the consumer and the producer is really the same person).
We have short time investments, like the chairs in the hairdressers saloon, or the food in the restaurant, or the wares in a sport shop. The investment returns in a short time.
Then we have the long time investments. The oil that we consume now, comes from platforms and wells that were made dozens of years ago. The same goes for hydro power and iron ore mines. The oil wells we invest in now, will give us oil to consume in twenty years.
In between are investments of varying time to consumable products.
The price signals govern what the capitalists invest in. For long time capital investments, it was oil and iron. What is invested now, likewise is governed by the price signals. Some think that electric cars, and self driving cars are the thing of the future, therefore the megafactory.
There is a balance between saving and the different categories of investments. If the consumers save more, in aggregate, than they used to, more capital is available, bidding down the interest (and bidding down current consumer prices). This signals to investors: forget short time investments, go long term!
Opposite, if consumers save less, they bid up current consumer goods and less capital is available. Both signals to the investor: Forget long term, invest in goods and services for the immediate future. And the balance is restored.
NOW, WHAT HAPPENED?
Central banks, not the savers, made money available, bidding down the interest rate. Since the financial crisis, but really, long before that, all the way back to the eighties.
This signalled to investors: Go long term! AND to the consumers: Consume now!
This is the reason for the epic imbalance in the capital structure. We have had bidding up of consumer goods and at the same time heavy investing in long term investments. Now, after these investments begin to materialize into consumer goods, we have exhausted consumers (lending), and a surplus of goods from long time investments (oil, iron, buildings, infrastructure). Too many oil wells, mines, railways, car factories hotels, offices and houses. (If you haven't seen surplus in all that, you will soon). Errors in deployment of scarce capital means lower productivity and lower standard of living for all. It is a world problem.
The problem will persist as long as the interest rate is manipulated by central banks, and years after.
Good stuff and makes our current predicament very clear. But to what end? Stand With Rand? Go Galt? Short everything but the almighty dollar? Move to Goa and dance on the beach? But, aren't those central bankers the smartest people in the world, who have only the general health and happiness of the global population at heart? Or...? https://www.youtube.com/watch?v=2NlXbeB9mNghttp://www.forbes.com/sites/nathanlewis/2014/12/19/its-official-elvira-nabiullina-wins-the-tall-pointy-hat-award-for-mismanagement-of-the-ruble/(When I read articles about gold, I also mentally substitute in Bitcoin. The larger population will get there eventually.) Nathan Lewis is Steve Forbes gold guy. Most Forbes articles on gold come from his pen. I shared a private dinner with him and Bernard von NotHaus at a Malibu Beach restaurant a couple years back. We had some lively discussions. |
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1. Bitcoins are only created on main chain (bitcoin blockchain)
2. Side chains are child chains.
3. The smaller bitcoin blockchain is (smaller block) the more miners will mine it and MC will be more decentralized
1) that's not the concern, you can earn a Bitcoin equivalent on the protocol level by mining a SideChain, that's the issue. absolutely false How so? What mechanism would SC use to secure there chain? Would transaction fees not be an option? It isn't "absolutely" false, (nor is it universally true) it would depend on the SC. The SC can do pretty much anything. |
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SCIence Property Auction ( SCI Points )
Please post your bids in the following format:
(no SCI points) @ (price per point)
This is a great opportunity to acquire Science points to be used in future technology advancements if you do not have any research facilities!
100 @ 0.1Mm |
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NewLiberty, what kind of dice do you have there? How does it differ from normal dices/coin toss?
That is a 16-sided dice. You only need to roll it 64 times to get a 256-bit number. On the other hand, with a normal 6-sided dice, you need to roll it 100 times. More the side... less the randomness. Why? Are you assuming they are not balanced or something? |
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NewLiberty, what kind of dice do you have there? How does it differ from normal dices/coin toss?
These are 16 sided hexidecimal dice. Despite Anditoshi's sage advice on much of the fluff around this method, using dice or coins is not significantly reduce or increaes the entropy of key generation. It just isn't code+machine doing it. Ultimately you are going to have to trust some device to use your bitcoin, but doing it by hand for novelty's sake is fun for some. |
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What is heartbreaking to read in this history, is instead of learning from their mistakes and return to a decentralized and market based system that worked, FDR doubled down and created regulations in the place of market forces and banned individual ownership of money, and he was cheered for it. This is the moment America choose security over freedom and when the experiment failed IMHO.
"If a problem seems intractable, enlarge it" This is a commonplace government solution method, and it is often how we get bigger governments. The point to this long winded post is paper backed gold can (and did) work, it's just that it requires a decentralized system that can withstand individual failures and uses market forces to keep honesty. Sound familiar?
More recently, the Liberty Dollar. A gold and silver backed ledger using warehouse receipts, audited monthly. All the audits were perfect and showed zero leverage. The US federal government could not believe that someone would actually do this (because they don't) and so accused it of fraud and counterfeiting and conspiracy. As it turned out there wasn't any fraud, and after fighting the case for the last 6 years, the government is finally returning the gold and silver. |
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I've a bunch of these left over from when I was running around to all the conventions....  So they are for sale. If folks want them let me know and I will put some up for sale. The folks that made them aren't doing it any more so to get more I would have to make a very large order. |
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